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Trade Policy and Negotiations

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Trade policies and practices of rich countries and, increasingly, the large, emerging markets have important implications for the development agenda. CGD’s research in this area examines how these policies affect trade opportunities for developing countries and what that means for growth and poverty alleviation in those countries. A particular focus is what the shift from multilateralism to regional and bilateral trade negotiations means for smaller, poorer, and more vulnerable members of the international system.

The trade and investment architecture has become more complex over the past 20 years. New trade deals, such as the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), if completed and implemented will cover a large portion of global trade and investment.

Unlike multilateral agreements, richer partners usually set the terms of regional and bilateral agreements. While trade can be an important tool to create jobs and reduce poverty in poorer countries, major provisions in these “mega-regional” agreements often ignore developing country interests. Therefore, a big concern for developing countries that are not party to these agreements is that they could undermine the WTO’s role in setting the rules of trade. CGD’s analysis examines the implications of these negotiations for the global trading system, and suggests ways that policymakers can mitigate the negative effects for developing countries.

Expectations were low for the eleventh World Trade Organization (WTO) ministerial meeting in Buenos Aires, and on most accounts it still managed to under-deliver. This time around, US and Indian negotiators refused to compromise in service of achieving a consensus agreement in any area. Roughly three quarters of WTO members endorsed a precedent-setting, albeit hortatory, declaration on women and trade; the United States and India did not. And there were statements from varying groups of “like-minded” countries to pursue work in areas that could eventually lead to “plurilateral” agreements. Still, it is not clear these efforts are any more likely to overcome the sharp differences that have prevented compromise among the broader membership. And if they do, they could end up marginalizing smaller, less powerful developing countries.

Britain just announced a new policy for trading with developing countries after Brexit. It maintains the current framework of duty free, quota free access to British markets for least developed countries. It is a good basis for the further steps we’d like to see Britain take.

We’ve spent the past year focusing on beyond aid approaches to promoting gender equality worldwide, through discussions on how to improve outcomes for women and girls in areas ranging from migration to UN peacekeeping forces. Next we’re looking at how trade agreements can help to ensure they benefit women and men equally, whether they participate in the economy as wage workers, farmers, or entrepreneurs. That might take both carrots and sticks—because, at the moment, women are all too likely to lose out.

The UK Government has today published a white paper on its broad approach to Brexit—what ’s missing though is a commitment to developing countries on the UK’s trade policy. Having emphasised trade at the heart of its economic strategy on international development, it now needs to commit to providing “duty free quota free” access for developing countries, or risk damaging investment and trade over the next two years and beyond.